ADVANCED COLLECTIONS MANAGEMENT DECEMBER 2022 PAST PAPER

TUESDAY: 6 December 2022. Morning Paper. Time Allowed: 3 hours.

Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.

QUESTION ONE

1. Outline FOUR ways in which a credit manager could utilise the services of collection agencies on difficult accounts. (4 marks)

2. Discuss FOUR debt collection guidelines that management should consider when preparing a debt recovery strategy. (8 marks)

3. Examine FOUR techniques that could be applied by the collections department to improve on customer relations. (8 marks)

(Total: 20 marks)

QUESTION TWO

1. Describe the term “credit assets impairment”. (2 marks)

List FOUR events that might suggest evidence of credit assets impairment. (4 marks)

2. Outline FOUR disadvantages of the threat of winding up or bankruptcy. (4 marks)

3. Enumerate FOUR effects of nonperforming assets on a bank’s performance. (4 marks)

4. Propose THREE methods that could be applied to improve day sales outstanding (DSO). (6 marks)

(Total: 20 marks)

QUESTION THREE

1. Highlight FOUR benefits of developing collection letters’ reminder system. (4 marks)

2. Describe THREE methods used to protect accounts receivable other than trade credit insurance. (6 marks)

3. Explain the meaning of the term “counter claim”. (2 marks)

Summarise FOUR steps for recovering a debt through a civil suit. (8 marks)

(Total: 20 marks)

QUESTION FOUR

1. Highlight FOUR reasons for withholding supplies for defaulting clients. (4 marks)

2. Describe FOUR reasons why customers might delay payments. (8 marks)

3. Evaluate FOUR clauses contained in a debt collection contract. (8 marks)

(Total: 20 marks)

QUESTION FIVE

1. Enumerate SIX ways in which the 80/20 rule is used in debt collection. (6 marks)

2. Summarise SIX remedial measures that could prevent marginal account loss. (6 marks)

3. Evaluate FOUR strategies used to improve recovery rates when structuring payment plans. (8 marks)

(Total: 20 marks)

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